Amazon is an internationally recognized company that provides its users with a host of products and services on its website. Moreover, Amazon also provides a platform to individuals who wish to sell their products. The Middle East is a region that has seen an exponential growth in the interest and use of online services. Amazon recognized this as a lucrative opportunity and acquired souq.com, entering the Middle Eastern market as amazon.ae.
The UAE in particular has been quite receptive to the online market boom, with over $10 billion in online sales revenue in 2018. The high sales can be attributed to the average spending budget of online shoppers as well as a lack of apprehension towards the online mode of purchasing items. Over 63% of UAE’s internet users engage in online purchases. Moreover, the pandemic has further increased online sales. Such a lucrative market is hard to come by, which is why many are setting up online stores on sites like Amazon. In this article, we explore how you can set up your own online store and sell your products on Amazon successfully.
1. Understanding the market
Before you dive into the world of online selling, it’s important for you to select a line of business you can engage in that is profitable in the online space. Some of the top categories of products users purchase include the following:
a. Apparel and textiles
b. Handmade products
Moreover, the UAE’s shopping preferences also indicate overwhelming favor towards cash on delivery, with nearly half of all purchases being paid through this mode of payment. Enabling this mode of payment can help your business see a significant boost in sales.
2. Acquire a license
Once you’ve decided on your business model, it’s time to put it into action. To be able to sell on amazon.ae, you will require a trade license. More specifically, an e-commerce license will be required before you can proceed with your business setup. You can apply for a mainland or free zone license. Free zone licenses are more apt for e-commerce businesses due to the 100% customs exemptions as well as lack of currency restrictions.
SPC Free Zone provides e-commerce licenses, with a host of other benefits including a 10-year trade license option. Applying for an e-commerce license with us can enable you to get started on your business journey quickly and with ease! The self-regulated nature of free zones means that approvals are faster, and extra paperwork can be avoided.
3. Set up your Amazon seller account
The registration process to set up your Amazon seller account is simple; all you really need to do is enter your business’s details and select a seller plan. There are two types of seller plans, which are as follows:
a. Individual Plan: This is for those who do not require additional selling tools or other add-on programs.
b. Professional Plan: This is for those who plan to sell in large quantities and require the selling tools Amazon has in order to conduct business.
One of the benefits of the Professional Plan is that you do not have to pay anything upfront to avail this service. Once you make a sale through the program, a small percentage will go to paying the Professional Plan. This pay-as-you-go program eases financial burden on the entrepreneur due to its conditional-installment based payment system.
4. Selling Costs
When selling on Amazon, there are a few types of selling fees you’ll have to pay that depend on the products sold and fulfillment of the order. This includes referral fees, which are fees that sellers have to pay on each item sold. This amount varies depending on the category of the product and is deducted by Amazon.
5. Seller Central access
Once all your documents have been registered, you will have full access to your Seller Central account. This account is your one-stop shop for everything related to your seller account, including making inventory updates, adding product information, managing payments, and so much more.
Understanding the know-how’s and benefits of starting an e-commerce business can be confusing. Here at SPC Free Zone, our expert consultants break down the process of setting up an online store, making your dream online business setup in the UAE a reality in the easiest way possible. Contact us at 800 SPC FZ to start your online venture today.